The broader stock market has been particularly choppy, with seemingly every Title in recent days and weeks, pushing most stocks up or down synchronously. As a result, a clearly defined trading range has formed on the daily charts, not only on some key metrics, as well as some major stocks, such as the alphabet Inc (Nasdaq:goodbye, U.S.stock markets). Traders can now watch for trading stock alphabet long or short depending on which direction the stock price to escape from this well-defined trading range.
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Important reminder, stocks are highly correlated asset class, which is to say that especially when volatility rises most stocks will grow in any market and, conversely, down days. Similarly, when the broader market chops sideways, as is currently done for a few days and do a couple of months, most stocks will do the same.
That’s why I’m always first to defend the so-called top-down approach to analyze and trade the financial markets. This approach begins with an assessment of the direction of the broader stock market, and then drilled individual sectors and groups of stocks before ever considering an individual stock or the option. The reason why this works so well is simple math and understanding the basic relationships.
Stock markets stock chart
Click to enlarge
Moving averages legend: red – 200 a week, blue – 100 a week, yellow – 50 a week
With this in mind, let’s look at the multiyear weekly chart stock alphabet and notice that the result of the above-average amount of dizziness, stocks in January has broken the upper end of its bullish channel. We can call it a classic flight rally and one that usually ends with so a retracement down to its main trade channel.
Over the past two months, that’s exactly what happened as the buyers have exhausted itself in January. From this Angle, the stock can call in the low to mid $900 before better buying opportunity presents itself.
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Moving averages legend: red – 200 day, blue – 100 day, yellow – 50 days
For more active trading and investing crowd, but stock alphabet at this stage really offers something interesting. Note that in the last few trading days the stock chopped back and forth in the field as marked in red square on the chart. The upper end of this box is just about 1,047 $and the bottom end is closer to 995$.
While the stock could break in either direction in the near future, for now I’m focused on a potential breakout of this range to the upside. If and when the stock of alphabet was to break above $1,047 for growth can quickly become 1,090 $and any bearish reversal on a daily closing basis would brake.
This net cash flow trade idea, with the current situation in the U.S. market.
Access Serge free MTR of the strategy for e-books here is to find high-probability trades, as a wall Street professional.
Check out Anthony Mirhaydari via the Daily market review for April 10.
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